UN backs inquiry into oil-for-food

The UN is calling on its officials to cooperate with an independent inquiry into abuses in the oil-for-food programme for Iraq but Kofi Annan, the secretary-general, said even if there were flaws in the scheme it had benefited ordinary Iraqis.

"It is unfortunate that there have been so many allegations, and some of it is being handled as if they were facts ... " he said.

"In all this what has been lost is the fact that the oil-for-food programme did provide relief; every household was touched," he said.

The UN is sensitive to charges of past abuse because it is getting a bigger political role in Iraq as power is transferred from the Americans.

During its six-year existence, the programme oversaw the delivery of £22bn of humanitarian assistance.

Allegations of abuse surfaced in January when a Baghdad newspaper published a list of 270 politicians and officials from around the world who were said to have benefited from favours from the regime.

Under the scheme money from the oil sales was deposited in a UN account which was used to pay for food, medicine and other essential goods. But Iraq retained the right to choose who it gave contracts to and allegedly used this loophole to give the officials vouchers entitling them to purchase quantities of Iraqi crude. They could sell these vouchers to oil traders.

According to the list in the newspaper al-Mada the recipients included a former French minister, Middle Eastern politicians, the Russian Communist party and the Russian Orthodox church.

UN officials are particularly concerned about allegations against Benon Sevan, the UN official who headed the scheme. A Mr Sevan appeared on al-Mada's list.

Mr Sevan, who denies the charge, was to retire on May 31 but Mr Annan says he will be investigated.

Mr Annan has appointed an independent three-member panel led by Paul Volcker, a former chairman of the US federal reserve, to investigate.